What We’re Reading (Week Ending 14 June 2020) - 14 Jun 2020
Reading helps us learn about the world and it is a really important aspect of investing. The legendary Charlie Munger even goes so far as to say that ““I don’t think you can get to be a really good investor over a broad range without doing a massive amount of reading.” Jeremy and myself read widely across a range of topics, including investing, business, technology, and the world in general. We want to regularly share the best articles we’ve come across recently. Here they are (for the week ending 14 June 2020):
1. ‘Superforecasters’ Are Making Eerily Accurate Predictions About COVID-19. Our Leaders Could Learn From Their Approach – Tara Law
But in his spare time, Roth moonlights as a “superforecaster”— a member of a team of ordinary people who make surprisingly accurate predictions for the forecasting firm Good Judgment, Inc. In recent months, businesses, governments and other institutions have worked with superforecasters like Roth to help them understand how the COVID-19 outbreak might unfold.
That a group of semi-professional forecasters would somehow have accurate insight into anything as complex and important as the coronavirus pandemic sounds like the stuff of science fiction, or even ancient history—like the seers of old who told fortunes to kings and nobles. But the team behind Good Judgment, Inc. and the organization it spun off from (the research initiative Good Judgment Project) say they have established a rigorous system for identifying talented forecasters and sharpening their abilities…
… It’s unlikely that superforecasters like Roth could ever fully replace subject-matter experts. Michael Jackson, an associate scientific investigator at Kaiser Permanente Washington Health Research Institute, cautions that superforecasters are a “black box,” meaning their less-than-scientific methods make it impossible to vet their work in the same way that a scientist’s output would undergo peer review. And Philip Tetlock, a professor at the University of Pennsylvania and a co-founder of Good Judgment, acknowledges that there are times in which expertise is crucial (for example, he notes that some public health experts warned about the possibility of a coronavirus pandemic early in the outbreak.)
However, Tetlock argues that superforecasters have skills that experts may not: for example, they may also be more flexible than traditional scientists, because they’re not bound to a particular discipline or approach. Their predictions incorporate research and hard data, but also news reports and gut feelings. That way of working may increase their overall accuracy, says Tetlock…
… Superforecasters aren’t just smart, Tetlock says; they also tend to be actively open-minded and curious. They’re in “perpetual beta” mode, as he puts it in his book on the topic, Superforecasting: The Art and Science of Prediction— always striving to update their beliefs and improve themselves.
2. 6 Stoic Rituals That Will Make You Happy – Daily Stoic
The Stoics are saying there are no good or bad events, there’s only perception. Shakespeare encapsulated it well when he said, “Nothing either good nor bad but thinking makes it so.” Shakespeare and the Stoics are saying that the world around us is indifferent, it is objective. The Stoics are saying, “This happened to me,” is not the same as, “This happened to me and that’s bad.” They’re saying if you stop at the first part, you will be much more resilient and much more able to make some good out of anything that happens…
… Don’t set your mind on things you don’t possess as if they were yours, but count the blessings you actually possess and think how much you would desire them if they weren’t already yours.
3. Left-Handed DNA Has a Biological Role Within a Dynamic Genetic Code – Rachel Brazil
The DNA molecule was composed of the traditional sugar backbones and nucleotide pairs, but rather than the well-known right-handed spiral of the double helix structure, famously discovered by Watson and Crick in 1953, Wells’s polymer spiraled in the opposite direction, giving it a zigzag appearance.
Whether this bizarre form of DNA existed in cells and had any function, and what that might be, was hotly debated for nearly half a century. But research has recently confirmed its biological relevance. So-called Z-DNA is now thought to play roles in cancer and autoimmune diseases, and last year scientists confirmed its link to three inherited neurological disorders. Today, molecular biologists are beginning to understand that certain stretches of DNA can flip from the right- to the left-handed conformation as part of a dynamic code that controls how some RNA transcripts are edited. The hunt is now on to discover drugs that could target Z-DNA and the proteins that bind to it, in order to manipulate the expression of local genes.
4. The Story Behind Shundrawn Thomas’s Open Letter to Asset Management – Dawn Kissi
In “Breaking the Silence,” an open letter that has generated both internal and external praise since it was published on June 1, the Chicago-based African-American president of a firm with more than $900 billion under management wrote of a decades-old encounter with police in a Chicago suburb.
“It was profiling, pure and simple,” he wrote of the incident in which an officer unholstered his firearm after pulling him over for no other reason than Thomas being a black man in a white neighborhood. Unfortunately, this wasn’t an isolated incident; he has suffered numerous similar indignities throughout his life. In the wake of the recent killings across the United States of three African-Americans in separate incidents that have generated worldwide protests demanding an end to racial inequities, Thomas was moved to do what many feel needed to be done: “break the silence as it pertains to issues of prejudice and discrimination” and give voice to the pain.
5. 294: Cullen Roche Explains The Ultimate Breakdown Of The Federal Reserve – The Pomp Podcast
Ser Jing here: The link above brings you to a podcast hosted by Anthony Pompliano featuring investor Cullen Roche. Roche writes an excellent blog called Pragmatic Capitalism that offers his thoughts on how the modern monetary system works. In the podcast, Roche talks about his views on how the Federal Reserve actually works, and he shares his thoughts on why a lot of common beliefs about the US’s central bank (such as “money printing” will cause hyperinflation, and the Fed has manipulated interest rates to unsustainable lows) are wrong. Some of Roche’s commentary fly over my head because I don’t have a good grasp on the monetary system or the inner-workings of the Federal Reserve. But I still find Roche’s views important to note to gain a broader perspective on money.
6. The 6 Traits That Make a Rule Breaker – David Gardner
My what is I like to find the most innovative companies of our time and I like to make sure they’re not just R&D firms, or they’re not just a hope and a dream. They’re actually real-world companies delivering outstanding solutions, often disrupting the industries in which they are participating; but they’re real innovators and they could be potentially big-time innovators. Like maybe one day they’d grow up and be Amazon.com.
Those are my whats. I’ve always loved those companies. I think you and I should spend almost all of our time, if we’re trying to beat the market and we care enough to select stocks, I think we should be spending a lot of our time, anyway, looking at those kinds of companies. That’s my what.
My how is that I tend to buy and not really to sell.
I try to get in before the vast majority of others and out well after the vast majority of others. That’s a quote that I’ve sometimes used in the past — one of my maybe legacy lines one day that I’m hoping to just convey — how we do the “how of Rule Breaker Investing.” In before the vast majority of others. Out well after the vast majority of others and it’s that second part that’s so key. That’s kind of our how.
And what I said in that meeting 10 years ago was, “I think that’s why this approach works, because a lot of people who might go for innovators think that those are really high-priced stocks, or they’re momentum stocks, or you need to figure out when to sell those because they’re going to collapse, probably, at some point. I mean, you need to act in a volatile manner around volatile innovators.”
But we, instead, on this podcast and in my services Motley Fool Stock Advisor and Motley Fool Rule Breakers, I’ve got a scorecard almost two decades long, now, of stocks where we basically bought them and then kept holding. We did the opposite of how people think they should approach innovators.
And I think, because that puts us in a small corner of the big room of the investment world, there are not many others that have painted themselves into that little corner where we are. We’re kind of lonely, there, and that’s great news for you and me because most of the rest of the world will not adopt this investment approach and so that’s our what and that’s our how and when you put those two things together you have, I hope, a market-beating strategy you can use the rest of your life.
7. Watch This Black Hole Blow Bubbles – Dennis Overbye
In another example of casual cosmic malevolence, astronomers published a movie last month of what they said was a black hole shooting blobs of electrified gas and energy into space at almost the speed of light.
From a distance — quite a distance, of some 10,000 light-years — the black hole looked like a cosmic pop gun, propelling puffs of light across the sky. Up close … well you wouldn’t want to be up close, as clouds of sterilizing radiation a trillion miles wide swept by…
… “Consequences can be indirect,” she said. “A huge increase in cosmic rays during the Pliocene might have been indirectly responsible for the extinction of some ocean animals — not due to irradiation but due to damage to the ozone layer they created. So maybe crossing the path of a jet could indeed create a massive extinction, though we are a bit speculating here.”
As the bubbles traveled outward, they lit up the thin interstellar gas with a traveling light show.
